Friday, November 16, 2012

The western world is on both sides of the corruption battle

The west talks a good game in wanting the corruption in poorer countries tostop. Our leaders often use their pulpits to bully
the poorer nations into cleaning up their act. The leaders of the poor nations
that score some victories gain our respect and aid money. Still there are many
systems in the western world that support the corruption.

Paul Collier's latest opinion piece for the Guardian points out that those
perpetrators of corruption often turn to the western world for help. The
thieves hire lawyers and public relations firms from New
York, Paris or London. Their dirty money often flows thru
the western world without anyone stopping it. Collier is calling on western
leaders to do more to stop helping the thieves. In this snippet, he mentions Guinea leader
Aissatou Boiro who was gunned down last Friday by supporters of the very
thieves he was trying to catch.

With the US election out of the way, it is time for American companies to face this reality. To date, their response to the Cardin-Lugar amendment
requiring transparency in their transactions has been to mount a legal
challenge. Rather than this doomed and demeaning strategy of pushing
back, they would be well advised to push forward. Cardin-Lugar is being
imitated: this month the European parliament is likely to adopt it
across Europe. Canada, home to the world's main financial market for
second-tier resource extraction companies, is about to become an
aberrant laggard that is surely not beyond the reach of influence.

The
success of decent African governments in their struggle against
corruption is not only in our interest, it is partly our responsibility.
Inadvertently, we are currently providing much of the capacity needed
for corruption to fight back. We are not, of course, complicit in the
murder of Boiro, though her blood should remind us that brave people are
putting their lives on the line. But the sharp lawyers and slick public
relations consultants who counter the effort for clean governance are
not based in countries such as Guinea: they are in London, Paris and New
York.

Similarly, the clandestine flows of dirty money essential
for corruption, which Boiro was trying to trace, depend on an army of
facilitating lawyers, accountants and bankers. They are the people who
establish shell companies and nominee bank accounts to conceal true
beneficial ownership, and whip money across borders far faster than the
lumbering process of inter-governmental legal co-operation. Governments
such as Guinea's bear the brunt of these ethically wretched activities,
but they are beyond their capacities to address.

They are not, however, beyond our own capacities. We could turn the system of mutual legal assistance,
whereby governments are supposed to co-operate to prise information out
of suspected criminals and witnesses, from a sham into a reality. We
could require the documents that establish shell companies and bank
accounts to carry the names of the lawyers and bankers who executed
them. These people could then face legal liability to ensure that the
authorities could readily establish beneficial ownership. Our
governments and our associations have an obligation to rein in the
unscrupulous tail of our professions.